Domestic traders who have been relying on offshore cryptocurrency exchanges since the Chinese government’s crypto crackdown last fall are now in the crosshairs. That’s because the Chinese government is reportedly turning its attention to these users’ bank accounts.
The Hunt Is On
Naturally, the Chinese government can’t stop these offshore exchanges’ operations. What they can do, however, is scrutinize the fiat “onramps” — i.e., bank account details and so forth — to discern who the offending traders are.
And that’s precisely what they’re now doing, as Bloomberg is reporting government officials in the nation are making good on their concerns and threats by formally launching investigations into the relevant financial data.
The development marks a further intensification of the regulatory atmosphere in China, as Chinese crypto traders continue to be put under a microscope.
China Continues to Be a Lightning Rod
From China’s crackdown on cryptocurrency exchanges and ICOs last year, to Bitcoin developer Cøbra’s more recent concerns that the Chinese government can effectively centralize control over BTC, it’s clear that China is the cryptoverse’s boogeyman for now.
In a regulatory sense, China continues to demarcate itself at the far extreme of the spectrum, whereas nations like Japan and Belarus who have worked to liberalize access to cryptocurrencies in recent months occupy the other extreme.
When it comes to global traders who find themselves between these two sides, then, it’s no stretch to say that a vast supermajority would prefer to move towards Japan’s model rather than China’s.
And while that may be a given, the takeaway here is that China is providing a model for other nations who want to be similarly strict. Namely, in scrutinizing and catching traders through fiat onramps.
It’s that anxiety-inducing dynamic that has clear potential to be exported to the rest of the world, so it’s one to keep a close eye on.
What’s your take? Do you think China is doing its best to shake out cryptocurrency use in its borders? Sound off in the comments below.
Images via The Economist, Slate